According to a report from real estate outfit Polaris Pacific, there are 1,037 newly minted condo units in San Francisco right now waiting for buyers, joining 833 previously owned units on offer.
Is that a lot? Well, it’s the highest volume in five years, ever since the city started bouncing back from the previous housing crash. And it’s the first time in memory that the number of new condos in the city has swamped the number of old ones selling.
In fact, if the Polaris numbers are to be believed, there are almost as many new condos on sale right now as the previous four years combined. And there are 2,560 additional condo units and 6,533 extra apartments under construction right now, with a respective 5,688 and 6,355 more in the pipeline.
And yet, the present supply is only enough to last three and a half months, if demand continues as it has into the fall season. The city hasn’t cracked the ideal six month’s supply mark a single time since 2010.
Earlier this year, reports of condo demand flattening out gave rise to a few worries about the bursting of a supposed condo bubble. And, yes, it looks as if things are mellowing out a bit; Polaris reports a 3.6 percent year over year decrease in the demand for homes in high-rise buildings, even as demand for other types of homes heat up.
Polaris competitor Paragon notes that the city seems to be chilling out lately, but predicts a soft landing, noting a mere one percent increase in condo demand from last year. Between 2014 and 2015, the spike in demand was at 18 percent.
The median price of a condo went up just $30,000 last year (2.7 percent), after almost doubling the previous four years. And the median price dropped a bit in some neighborhoods, like SOMA (down $12,000) and Potrero Hill (down $1,000).
Most of the increase that did happen was driven by the Mission District, where prices jumped up 22 percent. "No market can go up 20 percent a year forever," Paragon reminds us. (Thank the gods.) But they don’t see "any conditions suggesting an imminent crash," either.
- SF Condo Market, June 2016 [Polaris Pacific]
- Soft Landing For SF [Paragon]
- Condo Demand May Have Peaked [Curbed SF]